Health Savings Account
For those employees who are making payroll contributions to the Health Savings Account - your contributions will be available for use and in your HSA account within 5 business days of the actual pay date. For example, if the pay date is a Friday, then the HSA funds will be in your account by the following Friday.
When you enroll in the PPO Savings Plan, you can use a Health Savings Account (HSA), administered by Highmark through Bank of America, to pay for your health care expenses. Visit Highmark's HSA website to manage and learn more about your Health Savings Account.
Here's what an HSA offers:
- You can contribute money to an HSA on a pre-tax basis with payroll deductions
- Money in your HSA grows tax-free and can be withdrawn tax-free to pay for eligible health care expenses
- Your balance rolls over from year to year and grows tax-free with interest, which means you can build significant savings over time
- You decide how much to contribute to your HSA, up to the annual IRS maximums
- You can use your HSA money today as you need it or you can leave your money in the account and grow future savings—or you can spend some now and save some for the future
- The account is yours, so you take the money with you if you retire from or leave Penn State or switch health plans at Open Enrollment each year
If you join the PPO Savings Plan, a HSA will automatically be created for you with Bank of America (BOA). All banking regulations apply and no funds will be deposited until the account is established. However, you do not have to make contributions to the account. Further, you may transfer the Penn State monies deposited into your HSA account to the HSA of your choice, and all costs associated in doing so will be incurred by you. You will also be responsible for closing the HSA account with Bank of America. It will also be your responsibility to work with your tax adviser to obtain the tax credit. If you fail to close the account and are in the HSA again in the following year, BOA could deduct unpaid $3.00 fees accrued against the account from Penn State’s seed monies in 2016.
Tax Information for 2015 HSA Members
If you were a member of the HSA in 2015, you will receive two tax documents from Bank of America during the 2016 benefit year.
Form 1099SA: Mailed in January of each year and shows your HSA distributions for the tax year. If you did not use any of the funds in 2015, you will NOT receive this form. This form IS filed with your taxes, even though you are not taxed on this amount.
Form 5498SA: Mailed in May of each year and shows your HSA contributions for the tax year. This form is NOT filed with your taxes, but is for your records only.
- HSA Tax form frequently asked questions
- Year End Letter from Highmark
- IRS publication regarding tax returns and tax-favored health accounts
Who can enroll in the PPO Savings Plan with the Health Savings Account (HSA)?
All full-time, benefits-eligible employees are eligible, however, the EMPLOYEE:
- CANNOT be enrolled in Medicare or be collecting Social Security benefits; we recommend that you consult with your financial advisor regarding implications of dis-enrolling from Medicare in order to be eligible for the HSA, as you will not be able to collect Social Security benefits unless you are enrolled in Medicare. IF you dis-enroll from Medicare, then you are able to contribute to the HSA.
- CANNOT be enrolled in another health plan
- CANNOT have a balance in a HEALTH CARE Flexible Spending Account
- CANNOT have a J1 Visa - J1 Visa holders are eligible for the PPO Blue plan only
Forms & Documents
- Debit Card Terms & Conditions
- Beneficiary Designation Form
- IRS Regulations
- How to contribute $1,000 for those over age 55
- Investing with your HSA
- HSA Investment Guide
- Custodial Agreement from Bank of America
- HSA Claim Submission Instructions
- HSA Welcome Kit
Please use the following link for the most up-to-date version of Highmark's Health Savings Account (HSA) claim form. If you need help finding a Highmark form, please contact Highmark directly at (800) 914-4384.
- You and your spouse
- All dependents you claim on your tax return
- Any person you could have claimed as a dependent on your return except that:
- The person filed a joint return
- The person had grose income of $3,900 or more, or
- You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return
If your HSA is not established with Bank of America by December 15 of any given year, and you are eligible for the Penn State contribution, you will receive such contribution in the following calendar/tax year, provided that your HSA is established at that time. You must have money in your HSA before you use it. For example, if you have used all of the allowable funds in your account and you get a medical bill from your doctor for $80, you cannot pay out of your HSA until you have enough to cover the amount You should keep your receipts in case you are audited by the IRS Bank of America charges a monthly account maintenance fee of $3.00, which will be automatically deducted from your account. One of the ways you may pay for medical services through your HSA includes using a debit card that will be issued to you.
Per IRS regulations, HSA reimbursements are allowed only on a tax-free basis for expenses incurred by tax dependents, which include individuals up to age 19, or up to age 24 if full-time students. Expenses for non-tax dependents, such as a non-disabled child age 25 or 26 who does not meet the IRS criteria for tax dependent status, generally cannot be reimbursed on a tax-free basis from an HSA even if the non-dependents are covered by your medical plan. Note that various factors (such as the child's age and level of financial support provided by the employee) will impact whether the child qualifies as the employee's tax dependent and it is the employee’s responsibility to know and understand who is and is not eligible to have expenses paid through the HSA. (This rule differs from Penn State’s eligibility rules for dependents, as adult children up to age 26 are eligible for coverage on the medical, dental and vision plans.) It is recommended that you contact your tax advisor for further information on this specific provision.
Due to IRS regulations governing HSA plans, if you are enrolled in the PPO Savings Plan for 2016, you are NOT eligible to enroll in the Health Care Flexible Spending Account. If you currently have any money in a Health Care FSA—either through yourself or through a spouse and your spouse will be covered on the PPO Savings Plan—you must use all of the money in this account for services incurred during 2015. An account that has had a contribution added within 90 days of opening is considered an active account. In the event that a member would withdrawal all amounts from their HSA there will be negative charges reflecting any administrative fees drawn while there is a zero balance. When additional contributions are added, outstanding administrative charges will be withdrawn. Should a member not contribute to the account and no additional amounts are added, the account will ultimately be closed and Bank of America will write off outstanding fees. If you change plans, leave or retire from Penn State, you will not experience any changes to the management of your HSA. When you end your medical coverage, your HSA becomes a "stand alone" HSA with Bank of America. Stand-alone HSAs have a $4.50 monthly fee, and you continue to: keep your account number, have access to manage your account through the Highmark website, and have access to customer service at Highmark at 800-914-4384. If you wish to transfer your HSA funds from Bank of America to another HSA account, use this form. Employees who have an HSA from another employer or institution may move their funds INTO the Highmark Bank of America HSA by completing this form.
Qualified medical expenses are those incurred by the following persons:
Interest Rates & Contribution Limits
|Less than $2,500.01||0.10%||0.10%|
|$2,500.01 to $10,000||0.20%||0.20%|
|$10,000.01 and over||0.30%||0.30%|
The annual percentage yield (APY) shown is as of 5/1/2014. The interest rate and APY may change after the account is opened. There is no minimum balance required to open the account. Fees may reduce earnings.
|Maximum Contribution Limits for:||2015||2016|
* If you are age 55 or older, you can make an additional catch-up contribution.
Schedule of Fees
This schedule of fees is part of the contract for your Health Savings Account with Bank of America. For other terms and conditions governing your account, please see the Custodial Agreement.
|Montly Maintenance Fee||$3.00|
|Deposited item returned||$5.00/item|
|Contribution deposit slips re-orders, per 15 slips||$5.00|
|Legal process fee (e.g., attachment, levy or garnishment), per occurence||$75.00*|
|Stop payment, each||$25,00|
|Excess contribution, per return||$25.00|
|Copy of account statement, each||$5.00|
|Copy of deposited item, each||$3.00|
|Copy of tax statement, each||$5.00|
For more information, contact Bank of America, using the number on the back of your card.
Contributing to your HSA
When you choose the PPO Savings Plan, an HSA will be automatically opened on your behalf and Penn State will make a contribution to your account that is available to use right away for eligible health care expenses.
The maximum annual Penn State HSA contribution per family is $800 combined. If you elect family coverage with the PPO Savings Plan (high-deductible) and have received an $800 contribution towards your HSA in 2016, should your spouse become an employee of the University during the calendar year they will not be eligible for any additional Penn State contribution to their HSA.
If both you and your spouse are employees of Penn State and have FAMILY coverage under the PPO Savings Plan (high-deductible) with the Health Savings Account (HSA), a HEALTH CARE Flexible Spending Account (FSA) cannot be opened under either employee. The IRS does not permit use of a health care FSA when enrolled in an HSA. (The Dependent Care FSA is available to either employee up to the IRS limits)
|If you elect this coverage:||2015 Penn State Contribution:|
|Family (also includes 2-person parent/child/children)||$800|
If you are enrolled in the PPO Savings Plan, you may make a separate election when you enroll in ESSIC to determine whether and how much you want to contribute to your HSA each pay period, up to IRS limits. For 2016, the IRS has set the HSA maximum contribution at $3,350 for Individual coverage and $6,750 for Family coverage. Keep in mind that the maximum contribution includes both Penn State’s contribution and your own.
Changing Your Employee Contribution
You may make payroll contribution amount changes on a monthly basis by completing a 2016 Health Savings Account (HSA) Contribution Election Agreement.
Effective with the next available payroll, your compensation will be reduced on a pre-tax basis by the amount(s) indicated and contributed to your Bank of America Health Savings Account through Highmark Blue Shield.
Your are responsible for ensuring that the annual maximum IRS contribution limit is not exceeded. Penn State is not responsible for tax consequences as a result of the employee contributing beyond the annual IRS contribution limit. The Penn State contribution is included in the annual IRS contribution limit. In 2016, you cannot contribute on a pre-tax deduction basis more than $2,950 if enrolled in Individual coverage in the PPO Savings Plan or $5,950 if enrolled in Family coverage in the PPO Savings Plan. Any HSA contributions you make directly to Bank of America also must be taken into consideration when determining whether your annual contribution limit has been exceeded.
If you will be age 55 before the end of the or older in 2016, and not enrolled in Medicare, you can contribute up to an additional $1,000 in “catch-up” contributions to your HSA. That means your maximum contribution is $4,350 for Individual coverage and $7,750 for Family coverage. If you cover a spouse who also is age 55 or older or will turn 55 in 2016 and is not covered by Medicare, you can open a Health Savings Account through another qualified financial institution and deposit another $1,000 in that account for them to use. This additional amount will not be payroll-deducted but needs to be directly arranged through the financial institution of your choice.